Silicon Valley Bank was acquired by First Citizens Bank Shares for $500 million from the Federal Deposit Insurance Corporation (FDIC).
FDIC released a statement regarding the agreement on March 26. According to a statement North Carolina-based First Citizens Bank is going to acquire custody of all of Silicon Valley Bank’s deposits and loans.
In accordance with a March 26 purchase and assumption agreement, 17 former Silicon Valley Bank branches will reopen as First Citizens Bank and Trust Company on March 27. Moreover, all SVB depositors will automatically become First Citizens Bank depositors.
The FDIC said in a statement, “Today’s transaction included the purchase of approximately $72 billion of Silicon Valley Bridge Bank’s assets at a discount of $16.5 billion.”
Today, we entered into an agreement with First-Citizens Bank & Trust Company to purchase and assume all deposits and loans of Silicon Valley Bridge Bank, N.A.https://t.co/vjDsnQxhrr pic.twitter.com/MI5lXN5y6r
— FDIC (@FDICgov) March 27, 2023
The FDIC will continue to be in charge of the receivership’s approximately $90 billion worth of securities and other assets. Additionally, the FDIC obtained equity appreciation rights on First Citizens BancShares, Inc. common stock valued at up to $500 million.
The bank, which has its headquarters in North Carolina, Is the 30th-largest commercial bank in the country as of March 10 and had $119 billion in deposits in addition to its $167 billion total assets.
On March 10, Silicon Valley Bank collapsed as a consequence of a bank run sparked by rumours of a serious liquidity crisis within the institution. The FDIC was then designated as the failing bank’s receiver, and it attempted to put the bank up for auction.
Two separate auctions were held for SVB’s assets: one for its traditional deposits division and the other for its high-net-worth private bank, which is housed within its retail operations.
Numerous firms were speculated to have either planned or offered bids for the collapsed U.S. bank.
According to Bloomberg, First Citizens began planning an SVB offer as early as March 18. It apparently made an offer for the entirety of SVB three days later. A First Citizens representative declined to comment at the time on “market rumours or speculation.”
First Citizen Bank to buy Silicon Valley Bank
First Citizens Bank has
🏦$109 billion Assets and
🏦$89 Billion DepositsSilicon Valley Bank had
🏦$209.0 billion Assets
🏦$175.4 billion depositsA Bank half the size is buying Silicon Valley Bank😅
Happens only in a crisis
— Aditya Shah (@AdityaD_Shah) March 27, 2023
It’s also believed that Valley National Bancorp, another local bank, made an offer for the failed institution.
A third U.S. regional bank, Citizens Financial Group, may have been preparing to make a bid for SVB’s private banking division, according to a March 24 Reuters report.
Read more: Silicon Valley Bank Collapse Might Trigger A Run On US Regional Banks
After SVB’s acquisition, will Bitcoin prices rebound?
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